ABSTRACT:In Ethiopia, urban unemployment is one of the socio-economic problems of urban population including Dire Dawa Administration where significant number of population is suffering from. According to the CSA (2018) employment- unemployment statistical survey report, the urban unemployment rate in Dire Dawa Administration is 25.3 percent. The unemployment rate among females is higher than males which accounts 33.5 percent and 17.6 percent respectively. The main purpose of this study is to assess the urban unemployment in Dire Dawa Administration. The study employed the annual statistical report of urban employment- unemployment survey (conducted from June, 2018 to July, 2018) by Ethiopian Central Statistics Agency. The study reveals that the rate of urban unemployment in Dire Dawa Administration is the highest in Ethiopia and far from the national unemployment rate which 19.0 percent. The survey report was supported with interview of individuals working in Dire Dawa economic bureau to triangulate the collected data. The unemployed population wants to work any available job to relief from their family assistance and support themselves and their families. Surprisingly, more than one third of unemployed population want to establish their own business, though still they did not do because of different constraints mainly shortage of finance, lack of training and finance and lack of place of working. Besides, the illiterate and trained urban population is more unemployed than that of the illiterate one which implies education doesn’t guarantee for employment. Therefore, the Dire Dawa administration should consider this problem and take a serious measure to minimize the unemployed population. The administration should focus on labour-intensive investments that can employ huge man-power at a time. Besides, the government should create suitable working environments for those who want to establish their own business including provision of financial credit without any collateral, working place and continuous training on entrepreneurship concepts with the collaboration of nearby higher institutions.